Month: July 2008

There are two parts to this article. The first part offers people in business a reminder of what can and must be done right now for your business. The second part offers my point of view on who is responsible for the less than exciting economic news headlines that seem to be part of our daily routine.

The Number One Action Step You Can Take To Grow Your Business In Difficult Economic Times and In Booming Economic Times.

Spend 50% of your time finding out how you can provide more value to your existing customers. As you find out then deliver that value. Spend 30 % of your time developing new customers. In summary, spend 80% of your time marketing. That’s it. If you are not growing your business, you are killing your business.

Who Is Responsible For The Negative Economic Events We Hear About Daily?

Do you remember there are rules and regulations already in place governing the banking system? Really doing a good job right?

Do you remember Sarbanes-Oxley? This was and is the law in response to the Enron fiasco and a number of other business situations awhile back. The idea was to prevent similar disasters from recurring. People seemed to forget there has been a professional internal controls standard already in place along with public company rules and regulations governed by the SEC. So with well founded governing policy already in place we enacted a law that has cost taxpayers billions of dollars and what is the result?

We have huge losses. The financial markets are in turmoil and so what is the conclusion? Our elected officials say we need more regulation. Where is it in the founding principles of our government does it say “we the people want the government to stick its nose everywhere we live and do business.”

Obviously I am a major advocate of very little federal government regulation and so a fair question is what are the alternatives?

I always look to what works for answers. In the history of our economy there are plenty of examples that provide guidance. When businesses provide value equal to or more than the price charged, people buy what is offered. When a business comes along and offers a competitive alternative that is superior to what is available people vote with their wallets. If what is offered by a business is not profitable for the business it ultimately fails. One example of this is the train wreck that occurred in the Internet Industry a number of years ago. Companies had a great story and were funded by private investors, but had no substantive product that was in demand by the market place or at least at a price the market was willing to pay. The economics of supply and demand worked perfectly. Companies failed and private investors got smarter. Where there was abuse, people went to Club Fed. Basic governance worked.

This portion of this article started with the question of who is responsible for the economic mess we seem to be in right now? Here is the answer……look in the mirror. We have allowed our governments to grow out of control and the ripple effect is an economic mess across this country that extends to international markets.

It is my belief I am totally responsible for everything that happens in my life. It took me a long time to understand that. Once I did, I can point to a noticeable improvement. Extending that to our economy and even beyond our borders, I know that when each person stops looking to others for a solution and delivers the message to people in public office that we have had enough with the regulations that don’t work, we as a country will grow stronger. We have the right to live our intentions in freedom and peace and we are sitting back and allowing others to weaken that right. It is time to say no more.

The last thing my readers need is another economic analysis report or some suggestion that I or anyone else out there flapping their jaws really know all the facts about the reason for current climate. Ladies and gentlemen. reading those headlines and spending time analyzing the crap in the news is a monumental waste of God given talent. Stop your bitching and moaning and take responsibility for what you have control over which is your life. All change starts with one person. Do you want to know who that person is? Look in the mirror.

If your business is suffering, if you have lost your sources of cash flow, if you are feeling tired, down, stressed or in general not very good, recognize this: it is very true that the way you feel is absolutely a direct result of how you think. Don’t believe it? OK by me if you want to be a martyr. For those of you that want to take responsibility here is a quick 5 Step Plan to move forward fast:

1. Recognize that most people you meet and talk to are going to be bitching and moaning about something or multiple things. Don’t play in that sandbox. There are a small group of people totally optomistic about the unlimited possibilities. These are the people you want to “hang out” with. So you don’t know anyone like that? I’ll tell you one source where I have met some wonderful people. Register for an account at www.Facebook.com and www.twitter.com You can begin by adding me (Steve Pohlit) as a friend and if you don’t think I am wonderful, you will soon find a large number of people who are.

2. Understand the dynamics of doing business are always changing. Since 1994 with the introduction of the Internet browser, the rate of advancement continues to accelerate. Do you remember a few years ago where Google Adwords was all the rage for on line marketing? Do you know the impact social networking is having on the Adwords market? When you look at the financial results of Google the impact may not seem obvious because Google is still the 800 pound gorilla. But if you become active in the social networking markets like Facebook, MySpace, YouTube and nearly daily growing rate of others you will see changing trend lines. I recently activated a site www.youtubemastery.net that begins to teach people how to use video to market their business and products on line. I can’t imagine recommending that even as recently as three years ago. I know at that point there were some progressive internet marketers using video but to encourage brick and morter businesses to use it would not have been very credible for me at that time. Now it would be irresponsible if I didn’t recommend it and teach it.

3. Nothing is the same forever…nothing. I am very familiar and experienced with using eBay stores as an adjunct to selling physical products using internet sites and retail stores. Several years ago the eBay model seemed to be an unmovable foundation for the auction business. In the last two weeks I was asked for my expert evaluation of a global trading platform that is very popular in the Europe. The person who contacted me was considering making a commitment of money and time to this business that is scheduled to enter the US. When I started studying this model I was amazed to discover that most of it was a completely new way of lookng at auctions and while I am not personally a person who has an interest spending time on landing an eBay deal, I can see myself playing in this new areana. Now since its origin is Europe, I had some difficulty understanding it. Once I thought I “got it” I developed an explanaton which you can see at www.dublian.com The point is whether you are a multi-billion dollar business, an entrepreneur, or an employeed person with a company you feel is well established for the long term, don’t fall into the trap of complacency. I’ll bet 6,500 people employed by Wachovia felt their position was secure until they discovered in the papers that their employer lost over $8 billion and was cutting their job. Nothing is permanent. My strongest advise with every business is the same: be very aggressive in taking care of current customers and growing market share. Do you think that advice would change under different economic conditions? It hasn’t and it won’t

4. If you are running a business with employees you should be very consistent on your expectatons for performance. It seems that when revenue and profits are under pressure, management starts taking a close look at employee performance. In some cases they don’t even care they just cut. Just cutting is rarely justified and is analogeous to removing a body part if you want to lose weight. That approach is just plain stupid. There is no change in the guidance here: The formula is A-P=V which stands for actual minus plan = variance. There must be a person accountable for each key variance in your business. That is how their performance is measured. Is it a simple as that. Yes and no which is why companies engage my me and my firm for assistance.

5. If you are repsonsible for a business that is really feeling financial and cash flow stress, every day you wait to call for assistance is a waste of very precious time needed to define and execute a turnaround plan. I have written about this before and will write about it again because it is a fact. Please visit www.turnaround-consulting-firm.com or call me direct right now at 727-587-7871.

The blessing of a changing economy is that is results in an opportunity to re-evaulate how you are running your business and your life. The people reading this either accept that they are responsible for what happens to them or blames everyone else. For a long time I had the mind-set it wasn’t me. Four years ago I concluded that mind-set was completely incorrect.

The last thing my readers need is another economic analysis report or some suggestion that I or anyone else out there flapping their jaws really know all the facts about the reason for current climate. Ladies and gentlemen. reading those headlines and spending time analyzing the crap in the news is a monumental waste of God given talent. Stop your bitching and moaning and take responsibility for what you have control over which is your life. All change starts with one person. Do you want to know who that person is? Look in the mirror.

If your business is suffering, if you have lost your sources of cash flow, if you are feeling tired, down, stressed or in general not very good, recognize this: it is very true that the way you feel is absolutely a direct result of how you think. Don’t believe it? OK by me if you want to be a martyr. For those of you that want to take responsibility here is a quick 5 Step Plan to move forward fast:

1. Recognize that most people you meet and talk to are going to be bitching and moaning about something or multiple things. Don’t play in that sandbox. There are a small group of people totally optomistic about the unlimited possibilities. These are the people you want to “hang out” with. So you don’t know anyone like that? I’ll tell you one source where I have met some wonderful people. Register for an account at www.Facebook.com and www.twitter.com You can begin by adding me (Steve Pohlit) as a friend and if you don’t think I am wonderful, you will soon find a large number of people who are.

2. Understand the dynamics of doing business are always changing. Since 1994 with the introduction of the Internet browser, the rate of advancement continues to accelerate. Do you remember a few years ago where Google Adwords was all the rage for on line marketing? Do you know the impact social networking is having on the Adwords market? When you look at the financial results of Google the impact may not seem obvious because Google is still the 800 pound gorilla. But if you become active in the social networking markets like Facebook, MySpace, YouTube and nearly daily growing rate of others you will see changing trend lines. I recently activated a site www.youtubemastery.net that begins to teach people how to use video to market their business and products on line. I can’t imagine recommending that even as recently as three years ago. I know at that point there were some progressive internet marketers using video but to encourage brick and morter businesses to use it would not have been very credible for me at that time. Now it would be irresponsible if I didn’t recommend it and teach it.

3. Nothing is the same forever…nothing. I am very familiar and experienced with using eBay stores as an adjunct to selling physical products using internet sites and retail stores. Several years ago the eBay model seemed to be an unmovable foundation for the auction business. In the last two weeks I was asked for my expert evaluation of a global trading platform that is very popular in the Europe. The person who contacted me was considering making a commitment of money and time to this business that is scheduled to enter the US. When I started studying this model I was amazed to discover that most of it was a completely new way of lookng at auctions and while I am not personally a person who has an interest spending time on landing an eBay deal, I can see myself playing in this new areana. Now since its origin is Europe, I had some difficulty understanding it. Once I thought I “got it” I developed an explanaton which you can see at www.dublian.com The point is whether you are a multi-billion dollar business, an entrepreneur, or an employeed person with a company you feel is well established for the long term, don’t fall into the trap of complacency. I’ll bet 6,500 people employed by Wachovia felt their position was secure until they discovered in the papers that their employer lost over $8 billion and was cutting their job. Nothing is permanent. My strongest advise with every business is the same: be very aggressive in taking care of current customers and growing market share. Do you think that advice would change under different economic conditions? It hasn’t and it won’t

4. If you are running a business with employees you should be very consistent on your expectatons for performance. It seems that when revenue and profits are under pressure, management starts taking a close look at employee performance. In some cases they don’t even care they just cut. Just cutting is rarely justified and is analogeous to removing a body part if you want to lose weight. That approach is just plain stupid. There is no change in the guidance here: The formula is A-P=V which stands for actual minus plan = variance. There must be a person accountable for each key variance in your business. That is how their performance is measured. Is it a simple as that. Yes and no which is why companies engage my me and my firm for assistance.

5. If you are repsonsible for a business that is really feeling financial and cash flow stress, every day you wait to call for assistance is a waste of very precious time needed to define and execute a turnaround plan. I have written about this before and will write about it again because it is a fact. Please visit www.turnaround-consulting-firm.com or call me direct right now at 727-587-7871.

The blessing of a changing economy is that is results in an opportunity to re-evaulate how you are running your business and your life. The people reading this either accept that they are responsible for what happens to them or blames everyone else. For a long time I had the mind-set it wasn’t me. Four years ago I concluded that mind-set was completely incorrect.

Do you have a business or maybe you are thinking about having one. It could be a company with employees, an information marketing business, a mlm distributorship or maybe you are an independent contractor. If so, you should be incorporated. You may have read about the tax deductions available to business owners. If you are not taking advantage of these you may be leaving money on the table. Follow tax laws for the advantage of your business. They were written for that purpose.

I just finished setting up another Subchapter S Corp. and outlined the essential steps in this process. Most people think they need to hire a CPA or business expert to get this done. You do not. Al the information is on line. Simply take action. Note: I am not a tax advisor or attorney. I am an advocate of using readily available information for making your own decisions and taking action.

Summary of The Three Steps…Details to Follow:

1. Register with the state where you select to be incorporated. This does not need be the state of your business location or residence. My latest registration is in Nevada and I live in Florida.

2. File for an EIN number with the IRS. This is an employee identification number and can be obtained on line almost instantly once you have your corporation registered.

3. If you are filing for Subchapter S status you must fax a completed request form to the IRS with your Corporate identity (name ) and your EIN number. That is why you follow these steps in sequence. The form is easy.

Additional Details of Setting Up A Corporation:

Types of Corporations:

The most common legal entities are a C Corporation and and S Corporation with an LLC growing in popularity. Generally, if you are a entrepreneur or privately held company with one or a few shareholders, an Subchapter S is likely what you will use. Some people prefer an LLC for specific types of businesses. Do your own research then act. You can set up an S Corp or LLC and then convert to a C Corp. The reverse may difficult.

Where To Incorporate and How To Do It.

The two most popular areas are Delaware and Nevada. I liked Nevada for a number of reasons but a lot of people use the state they are in and a lot of people select Delaware. Once the state was chosen I selected a registered agent called them and in about 20 minutes they had everything they needed to file with the State of Nevada.

Two weeks and about $300 later I received my papers and at that point could register the officers with the State. Another $125 unless you are late like me and pay a $75 penalty. (Rates vary by state and so do annual renewals.)

EIN and Subchapter S Status

Once you have registered the officers which can be done on line got to the IRS site and apply for an EIN number. This is done online, you receive your EIN almost instantly and there is no additional charge.

With the EIN number go back to the IRS site and print out form 2553 if you are filing for Subchapter S status and fax it in. You do not have Sub S status until you receive a letter from the IRS confirm such status.

Other Info

Since I incorporated in the State of Nevada I set up a virtual office in Las Vegas. So my business cards show offices in multiple states which I liked. There are tons of places that do this. I found one that set me up for $50 and charges $30 per month.

Summary

I just went through this process and it was relatively easy. However I recognize if you have no experience with this it may be confusing. Normally a local CPA firm can help you for a reasonable fee. I recommend anyone in business to be incorporated. It will make your life easier when it comes to keeping your business income and deductions separate from your personal return items.

As a reminder the popular definition of insanity is “doing the same thing over and over and expecting the different results”. Most companies continue to do business the same way and blame the economy and high gas prices on their declining business results when they should be looking in the mirror. There seems to be a strong undercurrent of “I am waiting for somebody to do something vs. I am responsible.”

The operative word here is most. There are sectors of the economy that have been hit by current conditions. I will leave that analysis to economist and academics. They have a lot more expertise in such matters and enjoy the intellectual debates of cause and effect. I have a laser beam focus on what individual companies can and should be doing to achieve their potential.

I am excluding from this article any company who is in serious cash flow difficulty. When a business gets to that point, crisis management… turnaround expertise is needed. MY firm International Resources does that work and we are very good at it. I always advise if you are in that situation, call me or a firm like mine right now as time is of the essence. My direct line is 727-587-7871.

What are “The 5 Steps To Stop Insane Management From Driving Business Into The Ground?”

1. Have a very clear profit plan at each line item of business performance. Measure actual performance against plan and have clear accountability for achieving the plan line item by line item. To implement this you must have timely, accurate and relevant information. No excuses…must have.

2. When people who are accountable for line item performance consistently fail to meet the stated goals, replace them. Period!

3. The number one function in a business that will be the subject of most of the excuses is sales. These excuses come from people who do not understand how to market to a consumer who places ever increasing importance on relationships. Why do you think the community building sites like YouTube, MySpace and Facebook are in the top ten most highly visited sites globally? According to Alexa, YouTube is 3 , MySpace is 6 and Facebook is 8 ) Every business must have a relationship driven marketing strategy and then implement it. See Relationship Marketing below.

4. Always be evaluating the market including on line competitors. I wonder if Microsoft, Yahoo and AOL in retrospect would have done anything different when Google first came to market? No company is immune from being seriously weekend by competition. I look at the drugstore landscape. I live in Florida where competition is very active particularly for pharmacy prescriptions. A new format of drugstores was introduced not that long ago by Walgreens, CVS, and others with positioning of buildings with 24 hour drive through pharmacies on high cost real estate. Two things have happened with those changes. Prices skyrocketed to pay for real estate and relationships with the pharmacy customer has almost become extinct. Within this landscape I am aware of several privately held drugstores doing very well because of their attention to customer relationships.

5. Don’t push a boulder up hill. Some companies were never meant to be. People start companies or buy existing companies because they think it is a good idea. The only opinion that matter is the market. If your business was not all that strong in the past and you are basically doing everything right, the best action to stopping the profit leaks may mean closing the doors. If you are not sure Contact Me.

Reality Business: The following examples are taken from just one day’s experiences – today.

1. I was talking with a former client who is now a good friend, who told me they have exposure on a large receivable as it looks like the customer is going out of business. After asking two questions I understood that procedures installed during the consulting project were ignored. Insane management. This happens all the time where people make exceptions to sound business practices and then wonder what went wrong. Follow well founded established policies and procedures without exception. Does that mean nothing will ever go wrong? No, but the surprises will be fewer and far between.

2. During a meeting with a very successful fund manager I asked him if there was any one or two things that he attributes to his success. We were specifically talking about clients who transfer portfolios of $250,000 and higher to him from other firms. He said: “just two things: first I have a “high touch” approach which cements the relationship. The markets have been unforgiving lately. I increase my meetings with clients when competitors are shying away from making calls to people whose portfolios have been hit. Second I have marketing funnel to my target audience that has consistently worked very well.” I am not writing the details as this is proprietary but I will tell you this – you don’t have to be a rocket scientist to figure it out.

3. I was invited to lunch at a very nice restaurant in Tampa. It has a fairly steep price tag for most of the selections. There were many tables available. Like nearly every other restaurant I have ever dined, regardless of price point, when I left they have no idea who I am and have no way of inviting me back. Insane management.

All in one day!!

Relationship Marketing:

I love talking about how easy it is for retail business to install a relationship marketing program. This is actually easy for every company, but most readers can relate to experiences with restaurants, grocery stores, dry cleaners, specialty shops and other retail stores. Just ask yourself when was the last time you received a thank you note, an incentive to come in for a special on a particularly slow day or a brief questionnaire asking you how they can serve you better? It happens. I listened to a story the other night about a business getting a fax every time it rains near the lunch hour from a nearby restaurant saying “It is raining. Our business will be slow today. Come in for a free Taco.”” Of course, nearly everyone will be buying more than one taco. But isn’t that cool and how hard is that to do?

Visit http://www.localretailmarketing.com for an idea on how you can begin strengthening your customer relationships. The information is free. My firm is not if you want us to do it for you. We get it done now which can be very valuable for you.

Does 200 million page views a month catch your attention? How about knowing 41% of the members between the ages of 34 and 55 and all groups are divided nearly evenly between male and female? If that isn’t enough to get your attention consider these:

1. Members look for content by areas of interest.
2. All content is video and each video can be described using text that is rich with targeted keywords for your product or service.

Just a Couple More Things

1. The information above is about YouTube.. the 6th highest volume site on the Internet. The demographic data is for the US only and yet YouTube is International. The real number are larger but not quantified.
2. There are more than 150 social media sites on line and growing. Each one is attempting to carve out a niche of the huge general market. Of the 150, approximately one third are video sites. Once a person masters YouTube alll the skills are generally transferable to other niche market video sites.

The Action Plan Tracker

I have a business consulting firm. I teach companies how to build revenues and profits using proven principles and processes. Part of the business consulting work plan is to help the client implement an improved and more effective marketing strategy. Social media is now a required component of my updated business marketing strategy model. The numbers of people joining social media sites and becoming very active are very significant and should not be ignored.

There are a huge number of businesses that do not have websites, use blogs, test on line promotion campaigns, execute effective email campaign which are all very proven and effective marketing tools. Social media sites generally completely ignored by most companies. The exceptions are wisely building brand and loyalty.

Very recently I developed the groups YouTube Mastery on Facebook and MySpace as well as the the site www.youtubemastery.net These resources are just being developed and the website is very underdeveloped. However, I have a very clear plan and once I reach that point I take action and sacrifice some perfection. People need to know about these opportunities now and begin using all the Internet tools plus traditional marketing tools in their business now. I currently advise business owners that they need to be devoting nearly 80% of their time on marketing. Part of that 80% includes working with staff and others accountable for marketing. Marketing and developing people are the two most important areas where a business owner needs to spend their time. All other responsibilities should be delegated. What if your are an entrepreneur of one. The point is still the same.

Right Now Action Steps:

1. Join the group YouTube Mastery on Facebook
2. Visit and register at www.youtubemastery.net

These two actions will result in you getting up to speed on using social media and social media video to market your business.